Auto dealers have been challenged to navigate the current market uncertainty, but some believe better days are on the horizon. Today on Inside Automotive, we are joined by Brandon Goodermont, Managing Director of Ontario Jeep Chrysler Dodge RAM FIAT, California. In this segment, Goodermont shares its future outlook and predictions for the industry.
Business is good, according to Goodermont. Stocks of new vehicles return regularly to dealerships. However, a combination of interest rates, inflation, and fuel consumption creates a perfect storm that begins to slow the industry.
As the pandemic continues to affect the economy, many people are wondering if the 0% incentive rate applies to vehicles ordered. The answer is yes, as long as the order arrives at the same time as the 0% is in effect. Since vehicles are released in a few months, it is advantageous for dealers to reevaluate the vehicle once it has arrived. This allows dealers to see where they are in the price bubble and adjust if necessary. Most dealerships have also changed their marketing due to the pandemic, but as inventory increases they will need to expand their marketing to stand out.
If you’ve spoken to new sellers about the current state of the market, you probably know things are far from ordinary. With the economy in flux due to the pandemic, many people are reconsidering their consumer habits, including those in the automotive industry. As we emerge from this difficult time, it’s crucial to have honest conversations with new sellers about what they can expect in the future. While the market may have been good for the auto industry in the past, that may not be the case in the future. It’s important to set realistic expectations, so everyone is on the same page.
As more manufacturers seek to work directly with customers, some industry players are concerned about what this will mean for them. “We see these manufacturers, especially with the development of electric vehicles, looking to work directly with customers, but we don’t really know how that will affect us,” Goodermont said. Regarding electric vehicles, Goodermont said there are still many unknowns about the infrastructure and the future disposal of batteries. This is something dealerships will need to watch out for as it could have a significant impact on the power grid and outages as well as future legislation.
The used car market is experiencing a decline in value, narrowing the gap between new car prices and used car values. This will force dealers to adjust the way cars are acquired and valued. Regarding current pricing, Goodermont said, “When it comes to pricing our vehicles, we want to be competitive, but not reduce the market by an extraordinary amount. We still have vehicles that we sell at market value and some that are at MSRP. »
The automotive industry is constantly changing and navigating it can be difficult for businesses. The Goodermont dealership takes a conservative industry approach to success. This means being careful and not moving or reacting too quickly.
Although no crystal ball can predict the future of the industry, businesses can stay afloat by being aware of the market and making the necessary adjustments. The biggest challenge facing automotive groups right now is the need for technicians. With the reinforced after-sales service, companies must have a constant volume of inventory. Goodermont thinks if companies can maintain a 45-day supply, they should be in good shape.
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